Solana still haunted by past FTX ties as SBF trial rages on

The explosive testimony of Alameda Research CEO Caroline Ellison this past week did more than make things extremely difficult for the defence of her ex-boyfriend Sam Bankman-Fried.

It also gave rise to numerous memes, including a fake Ellison quote claiming Alameda could turn Solana “on and off” to affect long positions — bullish bets on the direction of Solana’s native currency, SOL. The fake post was shared over X, formerly Twitter, and spread like wildfire.

“Geesh, as the leader of the Solana Soldiers, this hurts my heart,” disgraced crypto influencer Ben Armstrong tweeted, asking if the quotes were legitimate.

“Imagine building on top of this garbage,” Bitcoin maximalist Samson Mow added, reposting the fake post.

If the fake post was able to gain traction, it’s because of the close relationship Solana and Bankman-Fried used to have.

FTX overhang

At its peak, “Sam’s [SOL] stash was worth maybe $12 billion,” writes Michael Lewis in his new book, “Going Infinite: The Rise and Fall of a New Tycoon.”

In fact, Lewis writes that Bankman-Fried owned anywhere between 10% and 15% of the entire SOL supply through Alameda and FTX. Solana ecosystem tokens became casually known as “Sam coins” in the crypto space.

That’s one of the reasons crypto investors panicked when in September the FTX bankruptcy team obtained court approval to liquidate $3.4 billion worth of crypto assets — including over $1 billion in SOL tokens.

But Bankman-Fried’s downfall didn’t spell the end for Solana development.

“None of the builders I know viewed FTX as an existential catastrophe,” Rooter, the pseudonymous co-founder of lending protocol Solend, told DL News in August. “All of the fundamentals that brought us here — cheap fees, fast transactions, a strong ecosystem — were still there.

“Just lost a very good exchange with Solana support, but there were others,” they said.

$400,000 bug bounty

The fake Ellison post also referenced an issue that has recurrently plagued Solana — system shutdowns. It also suggested a potential vulnerability within the network, a claim that could have serious implications if true.

“There’s a $400,000 reward for anyone that can find code that can turn off Solana,” wrote Solana Foundation head of developer relations Jacob Creech on Thursday in response to the fake Ellison post. “Please go ahead and find it.”

The reward was launched last month — alongside bounties for potential consensus violations or potential loss of funds — to encourage hackers to report network vulnerabilities to the Solana development team.

The bug bounty would be awarded for demonstrations of instances where the consensus comes to a halt and requires human intervention, according to the description. Additionally, vulnerabilities pertaining to eclipse attacks and remote attacks that result in network partitioning are also eligible for the reward.

The bounty fee would be paid in Solana’s native token SOL and would be locked for a year.

Solana hasn’t experienced any outages since February — its longest period of uninterrupted uptime since March 2021.

The company behind Solana has attributed the improved performance to a series of upgrades meant to address its outage problem, including Ethereum-like fee markets that allow users to pay higher transaction fees in exchange for priority in the transaction queue.

Ekin Genç is the managing editor of DL News. You can reach him at ekin@dlnews.com. Tom Carreras is DL News’ Markets Correspondent. He is based in Costa Rica. For any tips, you can reach him at tcarreras@dlnews.com.